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A startup company wants me on board as a core software engineer, at a very early stage (Seed funding stage) – there are currently 8 people in the company (Three co-founders included).

They offer me slightly less than market salary, and 0.1% equity – Considering the high risk, and the amount of work I have to put in the products. this seems too low, doesn’t it??

Although, the technological challenges and the amount of new tech I will learn appeals to me, but I don’t want to be a slave.

What do you think I should do?

P.S. Sorry if this isn't the right place to ask this. (If it isn't, please direct me to the right one).

Thanks!

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    Questions asking for advice on a specific choice, such as what job to take or what skills to learn, are difficult to answer objectively and are rarely useful for anyone else. Instead of asking which decision to make, try asking how to make the decision, or for more specific details about one element of the decision. Oct 24, 2019 at 9:40
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    "0.1% equity" That would be 100k at a 100mio exit (which would be huge). Multiply that with a probability of 90% that there will never be an exit and you have 10k. So in the end it 'less than market salary and NOTHING MORE'. So yes, I have the same feeling that is too low. What do you have to give to get the equity? (e.g long notice period?)
    – FooTheBar
    Oct 24, 2019 at 9:43
  • @SouravGhosh, a more specific detail I'm concerned about is how much equity should I expect. According to an article I found: holloway.com/g/equity-compensation/sections/…. There is some data for stage A/B startups - but no % data for "seed" funding stage (and these values are base on silicon valley startups, which is not my case - (should it matter?)). I guess each startup is it's own unique case, but I can't just blindly accept/deny an offer without even knowing what to expect.
    – manish ma
    Oct 24, 2019 at 10:19

4 Answers 4

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I've seen similar equity related questions a few times and often counsel people not to get too enthusiastic with the demands (eg > 10%).

Having said that - 0.1% is absurdly low. I couldn't give you a specific number of course, but I think it should be quite a bit more. You need to factor in incentives for future employees and subsequent rounds of investors. But even so, I would have thought several percent would be more reasonable.

You also need to factor in the chance of company failure (very high) and the chance, if it is successful of getting cheated by the founders / eventual owners / others - and there are so many ways this can happen (bitter experience).

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    That is definitely low, you'd expect at least .5%-1% at that stage.
    – mxyzplk
    Oct 24, 2019 at 19:29
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I think a general answer to this question is possible. IMHO there are three factors involved.

Work/responsibilities: Do you like what you will be doing there? This should be your first question

Compensation: Is the compensation enough for you to support your lifestyle and if not are you willing/able to make changes to your lifestyle?

Risk: Can you afford the risk of suddenly having no job?

You are the only one who can answer these questions.

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They offer me slightly less than market salary, and 0.1% equity – Considering the high risk, and the amount of work I have to put in the products. this seems too low, doesn’t it??

Yes

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  • ..short but to the point ;)
    – iLuvLogix
    Oct 24, 2019 at 10:29
  • @Kilisi I know this is all business, and it depends on how much I bring to the table and how much they need me and so on. But is there a range I can play with? I guess asking for 10% is too much for an engineering position.
    – manish ma
    Oct 24, 2019 at 10:40
  • You can ask for anything you want, but if someone offered me 0.1% I wouldn't even bother negotiating
    – Kilisi
    Oct 24, 2019 at 11:46
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What do you think I should do?

Since you don't want to work for less than what you believe to be your market value, since you don't believe the equity being offered is enough, and since you indicate that you "don’t want to be a slave", it seems that this start is not for you.

You should decline the offer and probably look elsewhere for a non-startup job.

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  • So you just think I should decline? not even try to negotiate more equity %? For the right amount I would agree, I just don't know what it is (I just understand that 0.1% is quite low).
    – manish ma
    Oct 24, 2019 at 13:06

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